Tag: Everest Group News

Worsening Situation? Infosys, Wipro to Cut Jobs; Middle-level Employees to be Worst Hit | In the News

Peter Bendor Samuel, CEO of IT consulting firm Everest Group, told Times of India the industry growth has slowed and the “arbitrage first” segment (traditional IT services) is in secular decline. “When this is added to the pyramid factory model, which requires new freshers to be brought in every year to keep cost low, it results in an excess of more experienced employees,” he said.

Read more at Business Insider

In 2016 North America Led Setups of Digital Services Centers for Cloud, Automation and Analytics Services | Press Release

Everest Group offers report examining 2016 trends, 2017 predictions for global services industry

Of 76 global services centers established by service providers in 2016, North America led the way with 29 setups. In its recently published “Market Vista™: Global Services 2016 Year in Review” report, Everest Group explains that the increasing need for client proximity and use of automation is making North America an attractive location for service delivery, with the San Francisco, Seattle and Toronto areas standing out as hotbeds for cloud, analytics and automation services.

Among the service providers tracked in Everest Group’s Market Vista index, 63 percent of service provider setups in 2016 were focused on digital services, rather than traditional IT and business process services. With margins in decline and few service providers experiencing growth, the expansion of digital capabilities through organic and inorganic means is paramount to service provider viability.

“Over the past few years, the service providers we track in our Market Vista index have been more inclined toward opening innovative centers and labs that offer digital services rather than establishing delivery centers that offer traditional IT and business process services,” said Salil Dani, vice president in the Global Sourcing team at Everest Group. “North America and Asia Pacific are the two leading locations for supporting digital services, and North America took the lead in 2016 as service providers sought to leverage multiple Tier-2 onshore locations to increase speed-to-market and drive innovation.”

Another notable growth trend in 2016 involved investments by enterprises in Global In-house Centers (GICs), often called Shared Services or Captives. GIC investment in 2016 was at an all-time high with 29 percent year-on-year increase in new setups.

Both existing firms and new adopters contributed to the GIC activity in 2016, and large buyers (revenue exceeding US$10 billion) drove the growth, representing 52 percent of the new GIC setups. Enterprises based in North America and Rest of Europe (i.e., European countries other than the UK) are the strongest adopters of the GIC model. These trends are expected to continue in 2017.

Conversely, the global outsourcing market growth rate declined in each successive quarter of 2016, and Everest Group expects the growth rate will continue to decline to as low as 1.9 percent through 2019.

In terms of locations, the Top 10 locations for new center setups (i.e., India, Poland, Philippines, Ireland, Costa Rica, Singapore, Romania, Malaysia, Mexico and China) each experienced an increase in setups in 2016. While the list of Top 10 countries has remained fairly consistent over the past few years, players are increasingly seeking options outside APAC as evident by the growing share of Nearshore Europe.

Looking ahead to 2017, Everest Group predicts the following for the global services market:

  • Big disruption: Technology-led disruption will impact service delivery models to meet new value expectations.
  • Market slowdown: The outsourcing growth rate with continue to decline over the next 12-24 months.
  • Do It Yourself: Enterprises will demonstrate an increasing preference for in-house delivery.
  • Location portfolio realignment: Enterprises will have to revamp their location portfolio, given the changing nature of workforce skills and service delivery models.
  • ‘Go digital’: GICs will increasingly act as catalysts for the digital agenda.

These findings and predictions are explored in “Market Vista™: Global Services 2016 Year in Review: Global Services Industry facing ‘Winds of Change.'” This report gives an overview of the developments that took place in the global services industry in 2016. Highlights include key trends and drivers pertaining to GICs, offshore/nearshore locations, service providers, and outsourcing transactions. Besides providing an outlook for 2017, the report highlights implications for market participants as well.

Download Complimentary, Publication-Quality Graphics
High-resolution graphics illustrating key takeaways from this research can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Global In-house Center (GIC) activity 2016
  • Is your location portfolio changing with the times?
  • Off- and nearshore delivery continues to entice
  • Top 10 global services delivery locations activity
  • Top service providers beware!
  • Outsourcing transactions: traditional vs. digital
  • 2016 Global services market activity heatmap

About Market Vista™
Market Vista—a subscription-based service of Everest Group—provides the research, analysis and insights that enable Global Sourcing professionals to navigate the complexity of today’s sourcing market and make informed and impactful decisions. Market Vista research includes developments related to service providers, locations, processes and sourcing models, as well as a comprehensive outlook of the fast-evolving global offshoring and outsourcing market.

Going Local is the New Mantra: Indian IT cos to Hire from US, UK campuses | In the News

Interestingly, Peter Bendor-Samuel, chief executive of global IT research firm Everest Group, says Indian firms can probably “get one last bite” of the H-1B visa lottery “apple”.

“Indian firms are moving to address their H-1B dependent workforce issues by increasing their hiring of experienced US workers and recruiting from US universities. Firms like Wipro are more advanced in this process and have already made substantial progress. However, I would stress that all of the Indian firms are still active in the H-1B lottery and will take as many of these as they can, but expect that the numbers will decline,” points out Bendor-Samuel.

Read more at the Business Standard

Robotic Process Automation Market Poised for Explosive Growth | In the News

Robotic process automation (RPA) technology typically uses artificial intelligence to handle repetitive, rules-based, back-office tasks. And the market is about to experience a period of “explosive” growth, according to an Everest Group study.
The RPA market grew 64 percent to $200 million last year and is expected to grow 70 to 90 percent by 2018 because successful pilot projects are inspiring buyer confidence in the technology, the consulting and research firm reports.

Read more at CIO online.

Infosys, TCS Saw H1-B Trouble Looming Even Before Trump Came into Power | In the News

Even before this latest executive order, it is clear that the Indian service provider industry was taking steps to reduce their dependency on H-1B, as reflected by the drop in overall applications for H-1B from 236,000 last year to 199,000 this year. The majority of this reduction is thought to be the reduced number of applications that the service providers are submitting, says Peter Bendor-Samuel, chief executive officer of Everest Group, a global information technology researcher.

Read more at the Business Standard

Trump’s H-1B Reform Resolves Few Questions | In the News

“It is clear that there is building bipartisan support for some of these changes, and it is likely that a merit-based system could get broad support,” says Peter Bendor-Samuel, CEO of outsourcing research and advisory firm Everest Group. “However, visa reform is likely to be complicated by broader immigration reform where there is not consensus.”

Read more at Computer World.

Trump Signs Order to Stop Misuse of H1B Visa; Indian IT to Tweak Biz Model | In the News

“It is clear that there is building bipartisan support for some of these changes, however, Visa reform is likely to be complicated by broader immigration reform where there is no consensus, further complicating this picture is a crowded legislative agenda with health care reform, and tax reform likely to take priority. Keeping this in mind it seems unlikely that any visas legislation will make its way through congress this year, leaving the current system in place for at least another year,” said Peter Bendor-Samuel, chief executive officer of Everest Group, the global technology researcher.

Read more at the Business Standard

 

Zensar Technologies: On the Digital Highway | In the News

In the new scheme of things, Zensar’s mid-size could be an advantage. “It’s lack of success in the previous era of services has given Zensar a leg-up as it has a much smaller and more manageable organisation to transform,” says Peter Bendor-Samuel, founder and CEO of Everest Group, a US-based management consulting and research firm.

Read more at Forbes India.

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